Maybe someone can check this for me

O

oldtrig

Full time employment: Posting here.
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Mar 11, 2009
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I am planning on a 2012 retirement. Here are some numbers that maybe someone else here can give some advise on.

I am age 64, my wife 63. I will be 65 in a few months. My take home pay now is $24,000 per year. I have retirement, taxes and several other things taken from my paycheck. My base pay is $42,000 per year. My wife has not worked in 20 years. We have no debt. If I retired this May my SS would be almost $18,000 per year and from what I have read no tax on this because $32,000 for married couples filing jointly is what you can make without paying tax. .

My wife only makes about $7,200.00 per year because she never worked much. I also will make a small pension from the state where I have worked for the past 15 years and that will be about $9000.00 per year. I also have to drive 20 miles per day at least 6 days a week and I use my vehicle and gas. We have lived good on this salary for the last 10 years because we have no debt. I have about Cd's yielding 4.5% for 14 more months.

I go on Medicare soon and I can purchase my wife's insurance until she reaches 65, or I can keep Cobra until then at $900 per month. I have researched this and from what I can tell I am working for almost nothing being I could make almost that much staying home. I have plenty to keep me busy as I still own a 70ftx50ft metal building on a four lane highway thats in need of repair. I also work on PC's as a hobby and have been doing this for 15 years. I also like to play golf and my membership will cost nothing because of the years I worked at the course. I guess I need a little shove. Any thoughts on my math? Thanks . oldtrig
 
From what you have said you would be getting $27,000 a year ($18,000 SS + $9,000 pension) if you retired today. Does the $18,000 include your wife's SS? Does the $9,000 pension increase periodically for cost of living? Plus you have a little side business income to boot.

It isn't clear whether what you need to live on is your current $24,000 take home pay or the combination of that plus your wife's $7,200 earnings (or whatever her take home is).

Suggest that you figure out how much you need to live on, including health care costs and compare that to what you would have coming in the door from SS and pension. The important thing to consider is that your expenses will be increasing each year as a result of inflation and your income may only partially increase so over time your standard of living might get squeezed by inflation.

It sounds like you are in pretty good shape to retire if you want to but there isn't enough information to tell for sure. Have you run your numbers through Firecalc or ORP? That would give you a better idea.

FIRECalc: A different kind of retirement calculator Optimal Retirement Calculator and Retirement Decision Support System
 
We live on lot less than the $24000 per year. We have not eat out in 25 years. We never travel. I like sleeping in my bed. I traveled the world while in the military so there is no much more I would care to see. My wife is happy staying at home and doing simple things. We do not drink or smoke and both in good health. We do walk a lot and maybe that has helped with the good health. The calculators are to confusing to me. I know I could not live a high live style but have never wanted that anyway. I hate to spend money now so I know that will not increase in the future. I look at my paycheck and get more disgusted. Why keep putting more in for retirement when there is no guarantee how much longer we will live? I hate to wait until I can hardly get around to retire so why not go now? I was self employed for over 20 years prior to the job I have now so I know how to make ends meet. It was tough some years but we made it. I am also tired of worrying about how I will pay for health insurance. That itself can stress someone to make their health go down. I want to go to sleep at night and not have to worry about setting an alarm clock. I guess I am ready to move on. Thanks and I will keep reading here on other suggestions. Old trig
 
Your are right that the calculators can be confusing. The calculators are targeted more towards those who are retiring earlier and those who rely on investment results in addition to SS and pension income in retirement. It sounds like your SS and pension may be enough since you LBYM.

If I understand you correctly you will have $27,000 a year coming in once you retire and you live on a lot less than $24,000 a year plus you have some savings put away.

It would seem that you are all set but on the other hand it seems that you are not comfortable with retiring even though you want to.
 
You hit it. I have not 100% decided to do it yet. I have to weigh the factors because once I go, there's no going back. I have saved pretty good for the average 64 year old. I paid my home off 15 years ago and it is in perfect condition. My property taxes on my commercial and home property is only about $400 a year. I have to ability and place to repair most any part of my four older vehicles. Why do I own four? good question. I bought all of them at bargains I guess. My son uses one of my trucks when he needs it. I took off from work the last 10 days to decide what I will do. I only got a few more days before I need to make the final decision so wish me luck. oldtrig
 
I'd double check what your options are with strong inflation. SS probably covers that as well as anything else, but you may have to use savings to help out the pension if it is not inflation adjusted.

Also firm up the medical budget, including medicare costs.

It sounds like you have some savings, or at least some investment property you could eventually sell, so hopefully you have some margin of safety there.

Those would be my main concerns. But really, it seems pretty reasonable from this distance. I think I'd be happy to do it.
 
Let's talk health care expenses. You say your take home is $24,000 that you hint you live on, but many people have health insurance removed from their paychecks before they take it home. So if you have to pay $900 a month for healthcare in the future, will you be living on $24,000 or on $35,000? While you don't want to worry about it, maybe one should?

And what does your spouse say about all this?
 
First, I don't hint I live on that amount:confused: I live on less. Its actually quite easy. We do not live in an area like other parts of the country do where things are super high. I have no debt. I also do not pay a lot for any insurance , taking only liability on my vehicles. I have not used a bank for borrowing money since the 70's. I also have money invested in US treasuries. You are also correct, I do have health insurance premiums removed from my check every two weeks for a total of $312.00 per month. I can keep that group plan but it costs $1300 a month. I will not though. I am a Vietnam veteran and plan on using the VA for any medicine I might have to take in the future. I will take the Medicare plan C. I will use the money I get from selling my vacation and sick leave to pay my insurance until we both get on Medicare. My wife also is begging me to retire as we worked together for 20 years before I took the job I have now. We plan on using my old business place to buy and sell small items. There you go. What you think?
 
Depending on your health you should look into the Medicare advantage plans . They IMO are a good deal for relatively healthy people not so great for people with chronic conditions..
 
Looks like it should work as long as your health is decent and inflation does not crush your income. My question is where do you live on 24K a year? I want to move there.
 
oldtrig said:
...(snip)... If I retired this May my SS would be almost $18,000 per year and from what I have read no tax on this because $32,000 for married couples filing jointly is what you can make without paying tax. .

My wife only makes about $7,200.00 per year because she never worked much....
Click to expand...
You may know this already but your wife is eligible for 50% of your SS. I'm guessing the $7200 she gets now is SS based on applying for an early (before full retirement age, FIA) spousal benefit once you apply for SS. She could also just apply for her own smaller benefit, wait until age 66 (FIA), and then apply for the spousal benefit. This will bump her up a bit more I think.

This is sort of what we are planning.
 
It sounds like you have a good handle on your expected retirement income before any taxes:

$18,000 (your SS at age 65)
$7,200 (your wife's SS, sounds like?)
$9000 (your pension)
-----------
$34,200 total

Maybe write down all your expected expenses if you haven't already to see what you'll spend?

Also, will your pension continue for your wife if you pass away before her? And check with SS to see what each of you would have if the other passes away (I am pretty sure you would no longer receive her $7200, for example--while she might receive your full share, but no longer her own).
 
By taking option B in my state pension my wife would continue to draw that amount. If I took option A I would get 1040.00 per month but if I die she would only get whats let. Option B is the only one that makes sense. I am not 100% sure what she would draw from my SS if I died. I need to check on that. Thanks, good question. oldtrig
 
While it sounds like you have a good handle on the source of your retirement income and your expenses (as they currently exist,) I don't get much of a sense of your assets. I'd like to think that there wouldn't be any dramatic change in your expenses down the road, but things can happen that are beyond your control.

On the income side...while it's not likely that a military pension would change...in these times...you never know for sure. Do you have assets (beyond your home) upon which you can fall back if needed?
 
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Thanks ARB57. I have in excess of $300,000 in cash invested in Cd's that will be due next year and the year after. We keep about $30,000 where we can write checks when we please. I own commercial property worth about $200,000.00. Not sure in todays market I could get that but I know it would quick sell for $135,000.00 because I was offered that a few months ago.

My home is worth about $100,000.00. I also have tools and equipment worth about $10,000.00 if I had to sell it quick, more if I sold slow. I also have some gold coins in my safe deposit box. I have not checked the value but I am sure it has went up since I put them there. I starting collecting baseball cards 30 years ago but the value on those are not much in todays market. I also have guns that are worth in the $3000.00 area.

The $9000.00 I will collect is in a state retirement so I would hope it would be as safe as anything. Same with my SS. I am still in good health and have the ability to fix most anything that runs including PC's. I just don't want to do that full time. Thirty years in the garage business was enough.

I repair PC's for friends and believe me I now have lots of friends.:D I have been doing this for 15 years. The PC work also keeps my mind working and I think anyone who has ever worked on one will attest to that.

Hows that for an uneducated country boy?:D
 
Well done! Between your income stream and the assets upon which to draw if needed...it sounds like you're in pretty darned good shape. There are no guarantees in life, but I'd be feeling pretty good if I were you.
 
Hi, Oldtrig. You've done really well for yourself and your wife. Congratulations. The numbers look fine. Let me summarize them. You will have

Social Security 18000
State Pension 7200
Wife's Pension 9000
Total income 34200

You also have financial assets totaling $500000. Your budget is $24,000 plus Medicare C premiums.

Oldtrig, looks like you both will be financially secure. Your social security pensions will increase with cost of living. The pension survivors benefit plus SS should provide for your wife, just in case. You have a cash fund for emergency expenses or major repairs. You also have commercial real estate assets that should keep with inflation. The only thing I see wrong in your post is the part about being an "uneducated country boy". The country boy part may be right, but there's nothing uneducated about you. :) Good job getting where you are.
 
MichaelB said:
Hi, Oldtrig. You've done really well for yourself and your wife. Congratulations. The numbers look fine. Let me summarize them. You will have

Social Security 18000
State Pension 7200
Wife's Pension 9000
Total income 34200

You also have financial assets totaling $500000. Your budget is $24,000 plus Medicare C premiums.

Oldtrig, looks like you both will be financially secure. Your social security pensions will increase with cost of living. The pension survivors benefit plus SS should provide for your wife, just in case. You have a cash fund for emergency expenses or major repairs. You also have commercial real estate assets that should keep with inflation. The only thing I see wrong in your post is the part about being an "uneducated country boy". The country boy part may be right, but there's nothing uneducated about you. :) Good job getting where you are.
Click to expand...

Yes, you are in good shape on what you have. It still would be really helpful to jot down on a piece of paper what you spend every month (I just go through the bank statements for the most part) and see where you stand on the outgoing part of the equation. You probably will find you live on much less than the expected retirement income, but if you come close. you will probably see some areas you can cut back on if you want to.
 
I'm just reading this for the first time. If wife's $9000 is supposed to be 1/2 your $18,000 SS, that amount is not true unless she waits till age 66 to start taking SS based on your record. Every year before age 66 she starts drawing on your SS reduces her SS payment by about 7-8%. I.e., at age 63, she gets like 37-38% of your $18000 or like about $7000. Also, even when you retire, every year you hold off drawing SS increases your payments by ~8% per year which also increases your wife's payment from your account up till she's 66. Net, if you can fund retirement from your savings (Some of those $300,000 CD's funds) & with the pensions, not SS, for some years, you'll be gaining 8%+ per year till you reach age 70. Also, when you die first, she gets your total SS amount. Net, again the longer you can not draw SS but fund from retirement funds, the more she will take in after you're gone. Of course this is irrelevant if she goes first. Good Luck.
 
My wife only makes about $7,200.00 SS as stated in my first post. She started at age 62. I plan on starting SS a few months before 65.

My Dad died at 71 and my Mother at 63. That is one reason I want to leave the workplace while I am good health. But that is only one reason.

Both my parents were heavy smokers. My wife and I have not smoked in over 30 years so I hope we will make it a few more years than they did. My Dad was also insulin dependent diabetic and had been for 15 years prior to his death. My Mother died in her sleep with a heart attack. Both my parents have been dead for(Mom) 32 years and (Dad) 25 years.

MichaelB, I guess I meant I was not college educated. I attended college in late 1966 for one semester then joined the military. School was just not for me but I do regret not learning more about writing. I am terrible in grammar.

This is a tough decision for my wife and me. Once I leave there is no going back as they will hire someone immediately. I really trust the great opinions here. I have been reading on this site for several years and you people are great. I just would like to know how it is not going to work. I have not missed many days working since I got out of the military in 1970. I have plenty of things to do to keep busy. I also would like to enjoy life a little better than my parents did when they aged.
 
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Oldtrig, I know what you meant :)
Feever makes an important point. It only takes a few minutes to make a list of your expenses, including new health insurance and Medicare premiums. This will test your plan, and it also will let you see if you have any room to cut should something unexpected happen. Do you know what your Medicare premiums will be?
 
So your wife is already collecting SS and gets $7,200/year and your SS if you retire in May will be $18,000/year or a total of $25,200/year. Your annual expenses are less than $24,000 a year.

For health care, your will use what you receive from unused vacation and sick leave to provide for health care until you are both eligible for Medicare.

On top of that you have a pension that will pay you $9,000/year and a side business repairing PCs and a commercial property (income producing?) plus $300,000 of investments that would provide $12,000 of income at a 4% sustainable withdrawal rate.

So all told, your income would be $46,200 ($18,000+$9,000+$7,200+$12,000) and your expenses will be <$24,000 + health care.

It sounds to me like you are set, especially since it sounds like you can scale down your <$24,000 in expenses if you needed to (but it doesn't sound like you will need to).

I think you should (as others have advised) do the same analysis as if you passed tomorrow and as if DW passed and if each scenario has an excess of income over expenses, start planning what you will do in you retirement. Congratulations.
 
Thanks again. I have researched and I will go with BCBS C Plus plan F at the cost of $150 per month. I understand that there will be $107 per month taken from my SS check for plan A so that has to be in the calculation of my expense. Never in our 41 years of marriage have we ever had a budget but is looks like I will have to come up with something.
Utilities including TV, internet, phone, power, garbage pickup, sewer bill, water and gas comes to around $300.00
insurance like car and home $100.00 per month
Food $300.00 per month
Gas for vehicles about $80.00 per month
Thats about it on expenses


:facepalm: Now for my wife's insurance plan. I have looked and will go with BlueChoice Essential for $195.00 per month with a $3000.00 deductible. I know it may not be the best but I refuse to pay everything I make to insurance. I can handle the deductible. She is in good health so I will gamble a little until she reaches 65. At least we would not go broke is she had to go in the hospital for an extended period. It looks like we would be paying $2340.00 per year for her and $3084.00 for me for a total of $5424.00. I can live with that. I know as years go bye all these will increase but so will my SS and State pension. What you think? You have to remember I cannot sit still very long and I have many ways to bring in extra income. If I get where I cannot go anymore then some of the numbers will go down because I would staying home all the time and not driving much. All of us are only going to live for x number of years and when we reach 65 the quality of life sometimes goes down so I want to spend time doing what I want while I am still in good health. Thanks for all the help and any more is much appreciated. oldtrig
 
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